Sunday, November 21, 2021

Portfolio Update - happy Thanksgiving

It has been a long time since I sat down and wrote about my portfolio. Life has become more busy and I let my portfolio go on auto-pilot in 2021. My workload has increased as I have been promoted to larger responsibilities, and spend most of my time traveling meeting new business opportunities. Right now, I do not have as close of a detail view of the stock markets but have been following at a high level. The promotion allows for more income, but I have not been continuously investing like my younger years, I just hold the cash now. 

Some takeaways I see from the overall market are:

  • All assets are very inflated, too much money chasing too few deals.
  • The COVID 19 stimulus and cash injection into the market and public hands has increased prices for everything.
  • Inflation is high. Cost of raw materials and living going up significantly.
  • There is a lack of labor or shortage of supply, increasing backlog and artificially inflating demand.
  • Dividends are very low yield, due to high money supply and low interest rates.
  • COVID 19 changed the way businesses work and do business with people, entire sectors of the industry are changed forever for the better or for the worse.
  • Increased demand for technology and any industry that supports the social distancing lifestyle and stay at home economy.
  • Decreased demand for discretionary type businesses such as restaurant and bar, travel and hotel, leisure, entertainment like movie theaters or amusement parks.
  • Decreased demand for office realty and large movement of people away from mega-cities to 2nd tier cities, creating price fluctuations (up and down, depending on region) on housing compared to pre-COVID period.
The overall effect of COVID 19 and the stimulus on my portfolio has been, overall, positive as basically all my stock prices have gone up. However, this presents a challenge as I have seen on companies worth purchasing during the last year. My portfolio is more defensive and less weighted in technology stocks, as a result my overall portfolio has had less capital gains than the S&P or Nasdaq indices. To me that is fine, as overall it is still going up and paying solid dividends. If a correction or recession occurs, my portfolio will suffer less of a serious percentage loss than the broader market.

I have actually kept all my cash position idle, and have not done anything with it except reinvesting dividends in the stocks that paid the dividends. The cash is unfortunately sitting in a low interest rate bank account, and not getting much return. The high interest rate savings account I see are now 0.50%, compared to rates above 1.0% several years ago when I used to use them, the interest rate has been going down across the board over the years which really makes it challenging to hold cash as there is no return for this asset and inflation is so high now.

The reason I am holding so much cash, it is around $120,000 USD as of this writing, is because I am looking to purchase a home. That cash will be used to start a mortgage. I am looking to finally settle down somewhere and have been looking at various cities across the United States where I can live in. My work does not require me to be in a particular city permanently, I can remote work. Most of my work is spent traveling from place to place as my work is distributed around the world and is international, which is something I like as it provides flexibility and choice. I also do not like to live in high cost of living cities and prefer a remote place or quiet location to live.